Posted: | January 26, 2023 04:54 PM |
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From: | Senator Amanda M. Cappelletti |
To: | All Senate members |
Subject: | Optional Affordable Housing Trust Funds (Act 137) Enhancements |
In the near future, I will introduce legislation to enhance the Optional Affordable Housing Funds Act. This program, known as Act 137, allows Pennsylvania counties to raise revenues for affordable housing needs by increasing fees charged for the recording of deeds and mortgages. These funds are an important source of revenue and contribute to a wide range of affordable housing projects in the 54 counties that have them in place.
However, the program has some shortcomings. Several significant findings and recommendations were identified in a report prepared by the Reinvestment Fund and Real Estate Strategies, Inc., Pennsylvania’s Housing Trust Funds: Current Conditions and Opportunities for the Future (January 2020). This legislation will offer three important changes to the Act based on these findings: it will increase the maximum amount of fees that can be collected, impose reporting requirements, and establish a Local Housing Trust Fund Community of Practice.
Most significantly for localities, the maximum amount of fees that counties can charge has not increased since 1993. For all counties except Philadelphia, the maximum fee a county can charge is limited to 100% of the base deed and mortgage recording fee that was in place as of 1993. Philadelphia has a higher cap as the result of Act 49 of 2005, which allowed cities of the first class to establish a fund and set the cap at 100% of fees in place at any given time. For all other counties, the statute does not include any provision for indexing the fee maximum for inflation. As a result, counties’ Act 137 revenues are substantially lower now than they used to be - in some cases lower by half. My legislation will increase the maximum fee counties can impose under the Act 137 program and index it for inflation.
In addition, current law has no reporting requirements for Act 137 funds, either from recipients of the funds or from a county itself. The flexibility counties have in how they use the funds is important, and this bill will not reduce flexibility that allows counties to tailor funding to their specific needs. However, regular tracking and reporting to the state will help to ensure programs are operated as effectively as possible.
Finally, as the Reinvestment Fund report called for, my legislation will establish a Local Housing Trust Fund Community of Practice, to offer regular opportunities for information exchange among Act 137 contacts around the state.
Please join me in cosponsoring this measure to enhance the benefits and function of this important affordable housing revenue source. |
Introduced as SB543